Dive Insight:

The California ISO has two products available for aggregated DERs: one for demand response providers, proxy demand response (PDR), and one for DER providers, known as DERP. In particular, CAISO developed rules for DERPs to allow for aggregating different types of resources in the ISO markets, but these complex rules have yet to be put into practice.

Still, companies are sussing out opportunities to leverage aggregated DERs, as the emerging market begins to gain traction. It is an approach companies such as Tesla and EnerNOC have taken, as have Advanced Microgrid Solutions and PowerSecure. In their new partnership, Stem and CPower say California is one of the first markets they plan to target.

The company told Greentech Media it is already “engaging with customers” and looking “forward to some quick wins in California.”

The partners hope to find synergies by joining batteries’ demand cutting ability with demand response tools that can turn down air conditioning and heating systems, refrigerators and motors.

“If you're solving it all with a battery, it’s going to be an expensive solution. If you’re doing it all with curtailment, it’s going to be a potentially disruptive solution,” Jason Babik, senior vice president of business strategy and development at CPower, told Greentech Media. Combining the two “can be really a 'one plus one equals three' type play,” he said.